Illegal Dismissal in the Philippines: Filing a Case and Legal Fees Explained

(Updated as of August 2025. This article is for general information only and does not replace personalized advice from a lawyer.)

1. What Counts as “Illegal Dismissal”?

Key Rule	Source	Practical Meaning
Art. 294 (formerly 279), Labor Code	Statute	An employee who is dismissed *without a valid cause and* without due process** is deemed illegally dismissed.
Burden of proof	Art. 299 & jurisprudence	Employer must show lawful cause and observance of procedure. Failure on either ground = illegality.

Test to remember

Substantive validity – Was there a just or authorized cause?

Procedural due process – Were the correct notices and hearings provided?

1.1 Substantive Grounds

Category	Legal Basis	Typical Examples
Just causes	Art. 297 (formerly 282)	Serious misconduct, willful disobedience, gross & habitual neglect, fraud/breach of trust, crime vs. employer, analogous causes.
Authorized causes	Arts. 298-299 (formerly 283-284)	Installation of labor-saving devices, redundancy, retrenchment to prevent losses, closure/cessation, disease certified incurable within 6 months.

No cause + no process = invalid Valid cause + no process = valid but still incurs nominal damages (Agabon v. NLRC, G.R. 158693, 17 Nov 2004).

1.2 Procedural Due Process

Type of Dismissal	Mandatory Steps
Just-cause	1) First notice (Specify acts & give 5-day minimum to explain) 2) Opportunity to be heard (hearing/consultation) 3) Second notice (Decision to dismiss, with reasons).
Authorized-cause	Single written notice served 30 days in advance on both employee & DOLE, stating ground and effectivity date.

Non-compliance with any step ≠ criminal, but triggers liabilities (backwages, nominal damages).

2. Remedies for an Illegally Dismissed Employee

Remedy	Statutory / Case Basis	How It Works
Reinstatement	Art. 294	Return to former position without loss of seniority; immediately executory even on appeal.
Full backwages	Art. 294	From dismissal date until actual reinstatement or payroll reinstatement.
Separation pay in lieu	Case law (Globe Mackay, Cabalan, etc.)	If reinstatement is impossible or not in employee’s best interest: ₱1 month per year of service (fraction ≥6 months = 1 year).
Damages	Civil Code, Art. 2224 – 2229	Moral and exemplary damages when employer acted in bad faith; nominal damages for due-process violations.
Attorney’s fees	Art. 2208 Civil Code	Up to 10 % of monetary award when employee compelled to litigate and wins.

3. Step-by-Step Filing Process

Mandatory Conciliation (SEnA)
- File a Request for Assistance (RFA) at the DOLE Single-Entry Assistance Desk within 30 days of dispute.
- 30-day period (extendible by 7 days) for mediation.
- If unresolved, you receive a “Referral” or “Certificate to File Action”.
Complaint at NLRC Regional Arbitration Branch (RAB)
- Submit NLRC Form 1 stating causes of action (illegal dismissal, money claims, damages).
- Docket fee: ₱500 + 2 % of total claims above ₱100,000 (updated 2023 schedule). Low-income complainants may file as pauper litigants (no fees).
- NLRC issues summons for mandatory conciliation-mediation (MAM); if still unresolved, case is raffled to Labor Arbiter.
Position Papers & Hearings
- Parties submit sworn position papers with evidence.
- Hearings are non-trial, but clarificatory questions may be asked.
Labor Arbiter Decision (target: 30 days from submission for decision).

Appeal

Level	Deadline	Key Costs
NLRC Commission	10 calendar days	Employer must post cash/surety bond = full monetary award (unless purely legal issues).
Court of Appeals (Rule 65)	60 days from receipt of NLRC decision	Filing & docket fees (~₱5-6 k + legal research).
Supreme Court	15 days from CA decision	Petition for Review on Certiorari; docket fees (~₱4 k) + deposit for costs.

Execution
- Once decision is final & executory, writ of execution issued; NLRC sheriff garnishes bank accounts, levies properties, or requires reinstatement/payroll reinstatement.

4. Prescriptive Periods

Claim	Prescriptive Period	Basis
Illegal dismissal (action for reinstatement)	4 years	Civil Code Art. 1146 (injury to rights).
Money claims (unpaid wages, 13th month, etc.)	3 years	Labor Code Art. 305 (formerly 291).
Offenses under Labor Code	3 years	Art. 306.

5. Venue & Representation

Venue: RAB where (a) employee worked, (b) employer operates, or (c) employee resides.
Who may represent: Self, lawyer, accredited union officer, or supervised law student (Rule 138-A).
Indigent parties qualify for Public Attorney’s Office (PAO) representation.

6. Legal Fees and Litigation Costs

Item	Typical Amount	Notes
SEnA filing	Free	Encourages early settlement.
NLRC docket	₱500 + 2 % of excess claims	Waivable for paupers.
Surety/cash bond (employer on appeal)	100 % of award	Must be posted within appeal period.
Attorney’s fees	10–25 % contingency of final award; or hourly (₱1,500–₱7,000/hr in Metro Manila)	Regulated by Code of Professional Responsibility & Accountability (CPRA, 2023).
Court of Appeals / SC docket	₱4,000–₱7,000	Subject to yearly revisions.
Incidental costs	Photocopies, notarization, sheriffs’ fees (~₱1,000–₱5,000).

Tip: Always execute a written fee agreement; inquire about fee caps under PAO guidelines or Integrated Bar legal-aid chapters.

7. Employer Defenses & Compliance Checklist

Documented Cause – Incident reports, audit findings, medical certificate (for disease).
Twin Notices – Proper service, receipt acknowledged or via registered mail.
Employee’s Explanation – Minutes of hearing, counsel assistance noted.
Final Notice – Clear findings, effectivity date.
Payment of separation/last pay where applicable.

Failure on any part almost guarantees liability—even if the underlying ground was valid.

8. Jurisprudence You Should Know (Landmarks)

Case	G.R. No.	Doctrine
Agabon v. NLRC	158693, 17 Nov 2004	Valid cause + no due process → dismissal stands, but nominal damages.
Jaka Food Processing v. Pacot	151378, 10 Mar 2005	Authorized cause + no notice → closure valid; 50 k nominal damages per worker.
Serrano v. Isetann	117040, 27 Jan 1999	Dismissal w/o notice/hearing = illegal even if confession allegedly signed.
Gamboa v. CA	164383, 16 Oct 2013	Burden on employer to prove receipt of notices; registry receipts alone insufficient.
Abbott Laboratories v. Alcaraz	192571, 23 July 2013	Separation pay in lieu of reinstatement when strained relations shown.

9. Practical Tips for Employees

Act quickly: Diary your dismissal date; observe the 4-year prescriptive clock (3 years for wage claims).
Gather evidence: ID cards, payslips, emails, CCTV screenshots, witness affidavits.
Use SEnA: It’s free and often results in early settlement.
Compute claims realistically: Over-inflated amounts increase filing fees and required appeal bond later.
Keep addresses updated: Summons/notices sent to your last known address are binding.

10. Frequently Asked Questions

Question	Short Answer
Can I resign and still sue?	Yes, if resignation was forced or retaliatory → treated as constructive dismissal.
I’m on a fixed-term contract—am I protected?	Yes. Premature non-renewal without cause = illegal dismissal.
What if my company closed due to pandemic losses?	Closure is an authorized cause if proven genuine and 30-day notice + separation pay were given.
Is emotional distress compensable?	Yes, moral damages require proof of bad faith + injury; amounts range ₱20 k–₱200 k+.
How long does a case take?	NLRC Arbiter stage averages 6–8 months; full appeals up to SC may run 3–5 years.

11. Key Takeaways

Illegal dismissal hinges on both the presence of a lawful ground and strict observance of statutory procedure. Employees enjoy potent remedies (reinstatement, backwages, damages), but must file within prescriptive periods and shoulder initial docket fees—often recoverable if they win. Employers, meanwhile, avoid ruinous liability by documenting cause, following the twin-notice rule, and treating due process as a non-negotiable.

When in doubt, consult a qualified labor lawyer or seek help from DOLE/PAO.